Sleeman Breweries has issued a profit warning. The Canadian-based brewer said yesterday (2 October) that its third quarter and annual profit will come in sharply lower than predicted, with earnings per share to come in between C$0.81 and C$0.85. Sleeman last month forecast earnings of at least C$0.99 per share.

The principle reason given for the lower outlook was the increase in competitive pricing activities, particularly in the Ontario and Quebec premium markets, but also in Eastern and Western Canada, in the value segment, where small brewers benefit from tax subsidies.

In a statement, John Sleeman, chairman and chief executive, said: "While we are pleased with the preliminary information on our third quarter and are confident about continued growth in the fourth quarter we have revised our previous guidance due to increased competitive price activities in the Canadian beer market and their estimated impacts on our prospects for the remainder of the year.

"At the same time, we believe the actions we are taking to reduce our production, distribution and selling, general and administrative costs coupled with the introduction of new products and sales and marketing programs as well as our new Femsa contract leave us well positioned to return to more traditional growth next year. Sleeman is a profitable company that remains committed to growing long term shareholder value. The management team is focused on taking the steps necessary to achieve this goal."

Actual results for the quarter to 1 October and further details on the company's expectations for the remainder of fiscal 2005 will be reported on Friday.

Sleeman Breweries is Canada's third largest behind Molson Coors and Labatt.